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Canada's Air Traffic Provider Announces Lowered Fees; U.S. Should Embrace Same Model

Today, Nav Canada, the Canadian air navigation service provider, announced it was implementing an average base rate cut of 3.9 percent, a temporary one-year rate reduction of 0.4 percent, and a 4.6 percent one-time refund. The revised service charges go into effect September 1, 2017. Nav Canada, a nonprofit corporation governed by a board of stakeholders, said the reason for its proposed rate reduction was stronger than expected traffic growth. 

Nav Canada is the most efficient and technologically advanced air navigation service provider in the world. Since the Canadian government decided 20 years ago to spin off air traffic control from the nation’s transportation department into a nongovernmental, nonprofit corporation, Nav Canada has seen its inflation-adjusted user fees fall 45 percent lower than the aviation taxes they replaced. Nav Canada is leading the way to develop satellite-based ADS-B for air traffic surveillance, and will become the first customer to use the new system for its Atlantic airspace in 2018.

Meanwhile, the U.S. Federal Aviation Administration (FAA) is drowning in a failed air traffic modernization plan called NextGen. Already years behind schedule and billions of dollars over budget, it is unclear when or if many of the claimed benefits of NextGen will ever materialize. In testimony before Congress earlier this month, the Department of Transportation Inspector General identified numerous failings at FAA. With respect to FAA’s inability to deliver new technologies, the IG identified “several systemic issues,” such as “overambitious plans, unreliable cost and schedule estimates, unstable requirements, software development problems, poorly defined benefits, and ineffective contract and program management.”

FAA cannot and should not be trusted to usher the U.S. into the 21st century of aviation. Fortunately, Nav Canada and dozens of other industrialized countries have shown us a better way: corporatizing air traffic control. This involves spinning off the air traffic control office of the aviation safety regulator (i.e., FAA’s Air Traffic Organization) into a separate entity that would then charge cost-based user fees. The safety regulator would then provide arms-length oversight, eliminating a troubling conflict of interest that the International Civil Aviation Organization has identified since 2001.

Fortunately, House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) is developing legislation to reform U.S. air traffic control to meet modern, global best practices. Like Nav Canada, it would establish a nongovernmental nonprofit to operate the civil airspace, which would then charge cost-based fees and be governed by a board of stakeholders with a fiduciary duty to the corporation. This plan is widely supported by airlines, the controllers’ union, independent aviation experts, free market and taxpayer watchdog organizations, the Pentagon, the Trump White House, and senior officials from the Obama, George W. Bush, Clinton, George H.W. Bush, and Reagan administrations.

Some opponents, such as House Transportation and Infrastructure Committee Ranking Member Peter DeFazio (D-OR), claim that the U.S. could never adopt Canadian-style management practices because the U.S. airspace is much larger and denser. It is true the U.S. national airspace system is much larger and more complex, but this actually benefits the U.S. by allowing it to harness greater economies of scale. Just as increasing air traffic helped keep Nav Canada’s rates low, so too will U.S. air traffic modernization benefit from the country’s large and growing air traffic volumes.

Despite the misleading claims of opponents with a vested interest in preserving the broken status quo, such as the corporate jet lobby National Business Aviation Association and its allies in Congress, nothing short of a major transformation of how the U.S. operates civil airspace will bring us into the 21st century of aviation.